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Here's Why It is Time to Invest in Chart Industries (GTLS)

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We believe that Chart Industries, Inc. (GTLS - Free Report) is a solid choice for investors who are seeking exposure in the machinery industry.

The stock, with roughly $2-billion market capitalization, was upgraded to a Zacks Rank #1 (Strong Buy) on Jun 20. The company delivered better-than-expected results in three of the last four quarters while recording in-line results in one. Average earnings surprise was a positive 23.81%.

Why the Upgrade?

We are providing a snapshot of how Chart Industries fared in first-quarter 2018. The company’s earnings of 23 cents per share surpassed the Zacks Consensus Estimate by 21.05%. Net sales went up 37% year over year, on the back of healthy performance of Energy & Chemicals, Distribution & Storage, and BioMedical segments. Orders increased roughly 35% organically compared with the year-ago quarter.

Chart Industries serves a diverse customer base in natural gas processing/petrochemical; industrial gas; liquefied natural gas; HVAC, power and refining; manufacturing/fabrication; electronic; healthcare; food & beverages; and environmental and life sciences end markets. Growing need for technologically-advanced products in these markets as well as rising environmental awareness globally (especially in emerging nations), aging population and regulatory changes will be a boon.

Strengthening product portfolio through innovation remains a priority for Chart Industries. Acquired assets have also boosted the company’s business opportunities over time. In January 2018, the company acquired Skaff Cryogenics & Cryo-Lease, LLC (Skaff). This buyout has been strengthening the company’s foothold in the Northeastern United States while its leasing business has created opportunities.

For 2018, Chart Industries anticipates adjusted earnings per share of $1.75-$2.00. This forecast, which is a revision from the previous expectation of $1.65-$1.90, includes the positive impact of 15 cents per share from tax reforms in the country. Also, it exceeds earnings of 96 cents per share recorded in 2017. Revenues are predicted to be $1.15-$1.20 billion, above $988.8 million generated in 2017.

In the past 60 days, the company’s earnings estimates for second-quarter 2018 have been revised upward by two brokerage firms while that for 2019 by three firms. The Zacks Consensus Estimate for the second quarter is pegged at 45 cents per share, reflecting growth of 4.7% from the 60-day ago tally. Likewise, earnings estimates of $2.86 for 2019 reflect growth of 14.4%. Earnings estimates for 2018 have remained stable in the past 60 days at $1.87.

Chart Industries, Inc. Price and Consensus


Moreover, the company’s price performance has been impressive. The stock has yielded 38.9% return year to date against the 8% decline recorded by the industry.

Other Stocks to Consider

Some other top-ranked stocks in the industry worth considering are Graco Inc. (GGG - Free Report) , Twin Disc, Incorporated (TWIN - Free Report) and Altra Industrial Motion Corp. (AIMC - Free Report) . While both Graco and Twin Disc sport a Zacks Rank #1, Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last 60 days, earnings estimates for each of these stocks have improved for the current year. Also, average positive earnings surprise for last four quarters has been 12.81% for Graco, 250.43% for Twin Disc and 5.06% for Altra Industrial Motion.

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